Lockyer Valley Fruit & Vegetable Processing Company plans to establish a $71m fruit and vegetable cannery operation just west of Brisbane.
Plans for the cannery at Grantham, between Brisbane and Toowoomba have moved to detailed financing negotiations, with the final mix of investor equity and bank debt for the A$71 million project expected to be determined by mid-year.
The agricultural footprint around the proposed 12 hectare industrial site at Grantham, is rated as the seventh highest yielding crop land in the world – the only such Top 10 rating in Australia – as it can produce two crops per year and therefore optimise throughputs on the canning lines by eliminating seasonal downtimes.
Plans for the new cannery include processing vegetables primarily from the Lockyer Valley but also tropical fruits and vegetables from throughout Queensland and even from wider afield.
Chief executive, Mr Colin Dorber, said today the company was near the end of its financing negotiations to inject upwards of $2.5 million of seed capital into the venture in coming days.
These additional funds would allow the completion by the end of June of already well advanced final feasibility studies for investment decision makers for the cannery.
Its initial production focus will be as the only Australian-based beetroot cannery in addition to pineapple and tomato runs, and later corn, replacing with a consumer-backed domestic product, millions of cans of currently imported vegetable and fruit product.
The project has been buoyed by a decision this week by the Lockyer Valley Regional Council to assist with guarantor status for up to A$1 million underwriting of the seed capital requirements and assistance to obtain further State/Federal government input.
Dorber said Lockyer Valley Fruit & Vegetable Processing had now mandated a senior corporate advisory firm and mainstream banking group to progress both an Information Memorandum for investors for release at the end of June and to settle the determination by then, of a recommended equity-debt ratio to totally fund the cannery.
The Company anticipates an equity raising of around A$50 million.
“The Information Memorandum will include all data from our completed feasibility studies; Business Case; Risk Analysis, and Strategic Plan plus inputs by the corporate advisors as to the compelling business case now being applied to this project after four years of rigorous studies, negotiations with growers, shippers and retail food chains, particularly the large supermarket players,” Dorber said.
“As the financing negotiations will be in a commercial-in-confidence environment, we do not anticipate making further public statements about the project until the formal release of the Information Memorandum.”
First production is slated for July 2017 from the proposed 23,500 square metre cannery.
Dorber said there was currently strong investor interest in the Australian agribusiness sector, in particular, opportunities to supply the domestic market with differentiated Australian grown consumer products and to develop growing new and high value export markets.